Autodesk subs – we hear you, but …

[This started out as a write-up of Autodesk’s latest earnings release but the preamble got so long that I think it needs to stand on its own. Earnings coming later this week. –Monica]

Before we dive into Autodesk’s Q4 and fiscal 2017, let’s talk big picture. Many, many of you have emailed or otherwise communicated your unhappiness about how Autodesk is changing the way it does business. You like buying things via perpetual licenses because you hold on to software for a very long time, pay maintenance when you can and go off maintenance when you must. You don’t like not having that choice any longer. I get it — all change is scary, this has financial ramifications, and you’re not sure you understand why (and I’m paraphrasing you a LOT) on earth Autodesk thinks it can do something that you see as so customer-unfriendly. But here’s the thing: Autodesk is allowed to run its business as it sees fit. It has employees to pay and shareholders to engage — and it can’t do any of that if it’s not making customers happy enough to buy their products. No buyers = no revenue = no way to pay people. Autodesk truly believes it is adding enough value to its subscriptions that you will want them today and will continue to pay for them tomorrow because there’s so much new goodness in there, that it’s a no-brainer for you. You need to figure out, of course, if that’s true; if there’s enough value to keep paying for the subscription. If there isn’t, you face all the same decision points that you would in any situation where a vendor underperforms: do you stay or do you go? Has Autodesk done this in the most elegant way possible? Perhaps not. Have they created paths forward for all of their customers? Maybe but there are always outliers who are more disenfranchised than others. Is there any way you can convince them that you’re so special that their changes don’t apply to you? I don’t see how. This ship has sailed, and you need to figure out if you’re jumping on or finding another route. I’m pretty sure Autodesk factored into its model some customer losses and decided that this was a risk it had to take to create the business it wants for the next decade or two.

None of the above is meant to minimize your concern, anguish or pain. This is real money we’re talking about. If you recently bought a perpetual license, you’re likely not happy. Same for a pirate finally paying for legit usage. And everybody else who will now pay more over the next 3-5 years. But the policy isn’t changing, so your only course now is to decide what you want and move forward. Leverage your switch to subscriptions to make clear what you need from Autodesk and its partners to stay as subscribers: Get together with other users and figure out your top enhancement requests, tell them what kind of support you need. Make them earn your renewal.

At least until you figure out whether an alternative solution is better for you. You know your business and its needs better than anyone. How critical is it that you use Inventor, for example? If you have bazillions of parts that you use all the time, maybe it’s better to subscribe and not have to convert those parts to another format. If you’re in an AEC project that’s only halfway done and Revit is the tool of record, same thing — sign up for the sub, defer any decision until near the end of the project. You use Delcam or HSM or Moldflow or something else that’s critical in your process and hard to change. Buy the subscription and keep an eye on what you’re getting. If it’s not enough, if it’s not going in the direction you need, think about switching. If, however, the subscription fits your needs, you see the admin benefits of managing your installed technology this way, and you want to keep gaining access to the new stuff as it’s rolled out –and the cost isn’t a huge hurdle–then stick with it.

Of course, you can do what many others are choosing: stick with your perpetual. Buy maintenance (or not). Keep that 2016 license going until it ages out –hardware won’t support it, no one knows how to use it– and then consider alternatives.

All of these are valid choices and are perfect for someone. Only you know what’s right for you.

Finally, this: Autodesk (like everyone who makes something we use) has a right to be paid for their goods and services. If it’s not worth what they’re asking, you’re free to find an alternative. You may disagree with how Autodesk went about it (and I certainly have expressed frustration to them, too), but this is how they’re moving forward. The only thing left is to decide on your response (if you haven’t already). A lot of people have moved to subs; they’re betting on a future that includes Autodesk. Others have told me they’re going to run their existing perpetual versions of products into the ground because they feel mistreated. Others are doing the same for cost reasons –wanting the sub, but unable to justify the cost now. How about you: Do you stay or do you go?

I’m going to strictly limit comments on this. By all means, give us your opinion but schoolyard rules apply: No bullying, name calling, cuss words.

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6 Comments

Ryan
on March 6, 2017 at 10:33 pm

If I am a stand alone company with no product integration or a startup then subscription makes sense from a business perspective. If I am a company with integrated systems that include CAD tools then subscription is not the way to go- because changes to software are limited to the organizations ability to test and update software with minimal risk to current workflows.
Yes subs have their benefits. But to go fully subscription is a tough pill to swallow. To continue to “pay to play” is not what companies desire in “partners”.

Monica Schnitger
on March 7, 2017 at 7:58 am

Thanks for your comment, Ryan. You’re not alone in saying that subs are a “tough pill to swallow”. I hope you’ll consider all of your options, business and technical. Let us know what you decide to do. Good luck!

Ram
on March 7, 2017 at 10:17 am

For all the people still complaining – if you don’t think it’s a good deal for you, please vote with your feet. Would you prefer if Autodesk went out of business while accommodating your wishes? Why do you think its okay to advice someone else on how to run their business?

Monica Schnitger
on March 7, 2017 at 12:16 pm

Hi, Ram. Thanks for your comment. All price hikes cause heartburn for the customer; I think part of the problem here is that people are taking personally what is, after all, a business decision.

Bill Clark
on March 7, 2017 at 12:57 pm

Monica,

Interesting article – thanks for all your great work in this field. The question of “Lease vs. Buy” is more complicated than perhaps it appears on the surface. Having been in the position to create and enforce this policy question myself, I have spent considerable time wrestling with the issue. I think you should begin with an understanding of the motivation for the decision. For me, it came down to two issues: (1) what is best for the customer, and (2) what will ultimately allow my company to differentiate itself from the completion and capture more market share. I believe annual licenses or subscriptions promote the democratization of simulation. The initial license costs are typically lower making it easier for new customers to try/adopt the technology. A subscription model requires the selling company to “win” your business every year. The implication being that software providers neglect customers at their own peril. A subscription model can also open the market to new entrants willing to compete for the business – providing further value to the consumer. To satisfy customers growing demands requires continuous investment in both the product AND (equally important) the customer support team. Software providers that decide to enforce annual subscriptions without a zealous commitment to their product development and customer care will soon discover the err in their ways.

Companies who decide to promote subscription models for their technology, and understand the implications, are doing their customers a great service. The resulting competition should promote additional innovation and foster more intimate customer interaction. My advice to those customers who feel nervous about the shift is as follows. Hold your software providers accountable – understand the product roadmap and influence it! Always be looking for an alternative solution that can replace part, or all, of your current solution. It is not a waste of time to periodically benchmark your solution against others to verify that you still have a good value with your current provider. Remember, they must win your business every year. Make them earn it!

Monica Schnitger
on March 7, 2017 at 2:33 pm

Well said, Bill. I can’t highlight in this tool set up, so readers:

Pay special attention to Bill’s advice in the last paragraph. Always be on the lookout for alternatives. Hold your vendors accountable — that’s a lot easier when you know you have options.